It Begins: Bundesbank To Commence Repatriating Gold From New York Fed

In what could be a watershed moment for the price, provenance, and future of physical gold, not to mention the "stability" of the entire monetary regime based on rock solid, undisputed "faith and credit" in paper money, German Handelsblatt reports in an exclusive that the long suffering German gold, all official 3,396 tons of it, is about to be moved. Specifically, it is about to be partially moved out of the New York Fed, where the majority, or 45% of it is currently stored, as well as the entirety of the 11% of German gold held with the Banque de France, and repatriated back home to Buba in Frankfurt, where just 31% of it is held as of this moment. And while it is one thing for a "crazy, lunatic" dictator such as Hugo Chavez to pull his gold out of the Bank of England, it is something entirely different, and far less dismissible, when the bank with the second most official gold reserves in the world proceeds to formally pull some of its gold from the bank with the most. In brief: this is a momentous development, one which may signify that the regime of mutual assured and very much telegraphed - because if the central banks don't have faith in one another, why should anyone else? - trust in central banks by other central banks is ending.

Much more importantly, it is being telegraphed as such, with Buba fully aware of just what the consequences of this (first partial, and then full; and certainly full vis-a-vis the nouveau socialist regime of Francois Hollande which will soon hold zero German gold) repatriation will be in a global monetary arena, which is already scraping by on the last traces of faith in a monetary system that is slowly but surely dying but first diluting itself to oblivion. And in simple game theory terms, the first party to defect from the prisoner's dilemma of all the bulk of global gold being held by the Fed, defects best. Then the second. Then the third. Until, in this particular case, the last central bank to pull its gold from the NY Fed and the other 2 primary depositories of developed world gold, London and Paris, just happens to discover their gold was never there to begin with, and instead served as collateral to paper gold subsequently rehypothecated several hundred times, and whose ultimate ownership deed is long gone.

It would be very ironic, if the Bundesbank, which many had assumed had bent over backwards to accommodate Mario Draghi's Goldmanesque demands to allow implicit monetization of peripheral nations' debts has just "returned the favor" by launching the greatest physical gold scramble of all time.

We present it in the original for fear of losing something in translation, but in broad English terms the above reads as follows:

The German Bundesbank is developing a new approach as to where its gold will be stored. According to exclusive information, to be fully announced on Wednesday, the bank will in the future hold less gold in the New York Fed, and no more hold in Paris (Banque de France). As a result, the distribution of German gold, of which 45% is held in New York, 13% in London, 11% in Paris and 31% in Frankfurt, is about to change.

There is no need to explain why this is huge news (for those who have not followed our series on the concerns and issue plaguing German gold can catch up here, here, here, here, and certainly here) . At least no need for us to explain. Instead we will let the Bundesbank do the explanation. The following section is the answer provided by the Bundesbank itself in late October in response to the question why it does notmove the gold back to Germany:

The reasons for storing gold reserves with foreign partner central banks are historical since, at the time, gold at these trading centres was transferred to the Bundesbank. To be more specific: in October 1951 the Bank deutscher Länder, the Bundesbank’s predecessor, purchased its first gold for DM 2.5 million; that was 529 kilograms at the time. By 1956, the gold reserves had risen to DM 6.2 billion, or 1,328 tonnes; upon its foundation in 1957, the Bundesbank took over these reserves. No further gold was added until the 1970s. During that entire period, we had nothing but the best of experiences with our partners in New York, London and Paris. There was never any doubt about the security of Germany’s gold. In future, we wish to continue to keep gold at international gold trading centres so that, when push comes to shove, we can have it available as a reserve asset as soon as possible. Gold stored in your home safe is not immediately available as collateral in case you need foreign currency. Take, for instance, the key role that the US dollar plays as a reserve currency in the global financial system. The gold held with the New York Fed can, in a crisis, be pledged with the Federal Reserve Bank as collateral against US dollar-denominated liquidity. Similar pound sterling liquidity could be obtained by pledging the gold that is held with the Bank of England.

And in case the above was not clear enough, below is the speech Buba's Andreas Dobret delivered to none other than NY Fed's Bill Dudley in early November:

Please let me also comment on the bizarre public discussion we are currently facing in Germany on the safety of our gold deposits outside Germany – a discussion which is driven by irrational fears.

In this context, I wish to warn against voluntarily adding fuel to the general sense of uncertainty among the German public in times like these by conducting a “phantom debate” on the safety of our gold reserves.

The arguments raised are not really convincing. And I am glad that this is common sense for most Germans. Following the statement by the President of the Federal Court of Auditors in Germany, the discussion is now likely to come to an end – and it should do so before it causes harm to the excellent relationship between the Bundesbank and the US Fed.

Throughout these sixty years, we have never encountered the slightest problem, let alone had any doubts concerning the credibility of the Fed [ZH may, and likely will, soon provide a few historical facts which will cast some serious doubts on this claim. Very serious doubts]. And for this, Bill, I would like to thank you personally. I am also grateful for your uncomplicated cooperation in so many matters. The Bundesbank will remain the Fed’s trusted partner in future, and we will continue to take advantage of the Fed’s services by storing some of our currency reserves as gold in New York.

So we wonder: what changed in the three months between November and now, that has caused such a dramatic about face at the Bundesbank, and that in light of all of the above, will make is explicitly very unambigous that the act of gold repatriation, assuming of course that Handelsblatt did not mischaracterize what is happening and misreport the facts, means the "excellent relationship" between the Fed and Buba, not to mention Banque de France which will shortly hold precisely zero German gold, has just collapsed.

Also, if the Bundesbank is first, who is next?

Finally, once the scramble to satisfy physical gold deliverable claims manifests itself in the market, we can't help but wonder what will happen to the price of gold: both paper and physical?

Germany and others have expressed doubts about the EU holding together, and talked of leaving it. I would make sure my economic assets were as completely under my control as possible before any major moves in the EU situation occured. One can never be sure of who will end up on what side. Having your gold in someone elses physical possesion would leave you less flexible in your options. What other assets is Germany trying to bring back home or sell off to bring the wealth back home? Repatriating the gold it already owns would be a first step to ultimately converting other foreign situated assets into more solid assets on home turf. At the very least, there is a long economic drought ahead. Maybe a real weather one as well. Would you have your fair weather friends continue to hold your food stores as they get very hungry?

Dec 21st passed. Gold is done. No longer a store of value. Rules changed in the middle of the game. If anyone cared gold would have rallied. Move on. oh, physical silver was such a con most of you fell for that too.

wow .... bonus day for clever humorous commentary at Zh with this one posting.

where else does one read this? certainly not at Bluumburgh ..... I cannot believe so many pay so much for Bluumburgh ....... I know I know, they have the Treasury pricing lock ...... but the rest of it is swill. Better to read MAD magaizine or Playboy

There’s been a lot going on, hasn’t there? It’s been a bit busy, what with the economy failing, Zac Effron sweeping box offices again and, oh, that whole thing about children becoming increasingly fat and unhealthy, yeah I guess that could be seen as an important issue.

The people are hungry Bob. Give them what they want. Give them what they need. I am you’re neighbor, lend me some sugar (in moderate doses of course).

In all seriousness, you’ve seen the negative effects that advertising junk food to children has. You’ve seen the nefarious ways that they target our youth. And you’ve most certainly seen the commercials on ABC’s Saturday Morning Cartoons.

Isn’t it time to do something? Couldn’t we just put an end to this? I have a crazy idea and it goes something like this. We find someone in a position of power, say a CEO of a huge company, say Disney. Starting to ring any bells? And then this person, out of social responsibility, decides to say that during Saturday Morning Cartoons there will be no ads accepted and aired, no matter the media dollars backing them, that promote junk food or unhealthy eating habits.

Well, gosh darnit TyDurden! What will fill that air time? Oh I don’t know. How about a few PSA’s with Zac and Miley eating carrots, playing basketball and talking about how great it is to be healthy.

But hey, it’s just a thought. After all, I’m nothing more than a mere soap maker.

If indeed there is a large descrepency in the amount of real gold versus on paper gold, then maybe it is time to start shuffling it around in hopes of it being spectacularly lost or stolen. Terrorists getting it and spitefully sinking it somewhere in the unknown ocean depths, as Osama was. Damn, have to write it off. But magically the amount in the vaults remains unchanged.

Henry Cisneros resigned Countrywide Mortgage Board of Directors (he was the godfather of CW for heaven's sake) in late 2005 or 2006. I knew at that moment when I read it in Barrrons, that that 'pressured' resignation (go see how it happened ... you will be surprised .. the 'system' still kind of worked) was the beginning of the beginning of the end. It took Bear Stearns, WaMu, Wachovia, then Lehman ..... then AIG ... then the freeze up of the money markets, those interest drivien unguaranteed bulk of modern western savings to have to force Sec'y Paulson to beg Nancy and Harry for TARP 1.

2013 - Remember don't become the 99% crowd when it happens. That's what they want. And the 1st revolution France stepped in and helped us out against the British to win. Don't think that's going to happen this time.

Peaceful resistance. Work stoppages by those that are the 52%ers and don't go outside the house.

The Atlantic pond is good for airplane accidents. I assume the gold is being transferred by planes? Or will they put the gold tungsten on a cruise ship before having Muslims hijack it, kill everyone on board, and sink it.

The Washington Examiner, quoting retired Four-Star Admiral James Lyons, writes: “the attack on the American Consulate in Benghazi… was the result of a bungled abduction attempt…. the first stage of an international prisoner exchange… that would have ensured the release of Omar Abdel Rahman, the ‘Blind Sheik’…”

But something went horribly wrong with Obama’s “October Surprise.” Although the Obama Administration intentionally gutted security at the consulate prior to the staged kidnapping, former Navy SEALs Tyrone Woods and Glen Doherty disobeyed direct orders to stand down, saved American lives, single-handedly killed scores of attackers…and the attackers, believing that Obama had betrayed them, tortured Ambassador Chris Stevens and dragged his body through the streets.

The Washington Examiner, quoting retired Four-Star Admiral James Lyons, writes: “the attack on the American Consulate in Benghazi… was the result of a bungled abduction attempt…. the first stage of an international prisoner exchange… that would have ensured the release of Omar Abdel Rahman, the ‘Blind Sheik’…”

But something went horribly wrong with Obama’s “October Surprise.” Although the Obama Administration intentionally gutted security at the consulate prior to the staged kidnapping, former Navy SEALs Tyrone Woods and Glen Doherty disobeyed direct orders to stand down, saved American lives, single-handedly killed scores of attackers…and the attackers, believing that Obama had betrayed them, tortured Ambassador Chris Stevens and dragged his body through the streets.

This is why they will use it to get that law on the books - wanting to know who is buying gold coins and everyone will have to register them if bought in the last x years and above the price of $500.

I don't think this is valid for gold coins that are minted by foreign countries and are thus foreign currency. So Vienna gold coins, Perth mint, canadian maple leafs should be ok.

Gold bars (w/out tungsten), walking liberties, us proof sets, etc will be confiscated to make up the difference OR all future sales will stop to the public and all output from all mining companies in the USA will be used to pay back what is owed.

Funny - I think I saw a movie recently about something like this and it was Atlas Shrugs. I could be wrong. I get confused about so many political overtones to movies these days its difficult to find one that's just for entertainment.

germany has all the gold....now what? each german/de paper things can be traded in for a piece of that golden pie? yes/no? do GE people still have to believe their government will keep the gold forever or they'll go broke eventually? wait. if they keep the gold forever, what good is it? i mean, to anyone?

so that don't work.

i know, they'll use it to buy foreign goods...you know, pay for imports...so that runs out eventually..or does it? not if GE improves to be self sufficient, so as to not have to pay out for their imports. and they have their gold. all ends well.

now, please understand that i think this would be the great and true triumph of gold. if carried to its end as the anchor, gold requires the seekers to become self sufficient, no matter gold's relative physical distribution amongst the throngs of defined geographical places. because it has to be somewhere. and now no one wants to lose it no matter what. that would be cool to have happen.

well back to reality.

i just wonder. can the big banks do an unwind on the DEbanky thing and make it give back the gold? or would ge/euro/china make a currency stand against the reserve currency?

now back to reality.

don't worry. north america will do fine as a defined geographical place in the new gold world order of things. great geology, natural resources, stretches from the north pole to the equater, great climate variations manageable over time. growing seasons, even in droughts... peace in north america is doable....etc...

go ahead. pick another continent you like bettor. travel encouraged. we do, however need to facilitate life, at least here. so, i guess we need a currency. a trusted one. at least in north america. (i vote for electrons. they are everywhere. rub you foot on a rug.)

now back to reality.

"A meaningless planet in an undiscovered solar system is a shame to waste."

Amazing it took them this long to come to their senses given the Treaty of Versailles and all that bait and switch history.

The MSM can downplay this all they like, but the important thing is the loss of confidence that a request from Germany signals. It's one thing for Chavez to ask for return of Venezuelan gold, but Germany is not so easily dismissed. If the Fed takes an extended period of time to "find" the gold that is allegedly sitting in easily accessible vaults right this very second, confidence might start waning in other countries that also have gold with the Fed.

Confidence and Faith.....that is what this story is about...gold and guns....countries, and people are starting to lose the faith and confidence.........If Germany asks for the order...other countries will not be far behind....maybe they will try to jump to the front...London is where most of the scams are HQ´d....fewer Regs there....from this the paper metal will collapse.....an exchange will fail I think....fakes will be made and sold...but if a government sends a fake....that is a big no no...thems fightin words...the leased metal will be phased out...and I bet the USA gets an audit out of the switcharoo.....Its going to get faster and faster as people see the Western world as not a saffe haven anymore...

I wonder who will want their gold next? If some percentage of this gold has been leased out, and we give everyone the gold we have that isn't leased, where will that leave us? I see a gathering rush for the exits. Gold is going to get more scarce than AR-15's at Wallmart. AR's were going for 4x price at some recent gun shows, so where would that put gold? 7k... sounds about right.

you gotta be stupid if you are a dictator/ chavez type to keep your gold in us central banks. if they want to get rid of you they just deny access and give it to the other folks. isn't that kind of what happened in lybia

Have some faith! Fractional reserve is such a great thing for people that make the multiplications - and these people ofcourse act in everybody's best interest. Now, how could anyone ruin this? It is never the scheme that is ridiculously unstable - it is always the fault of the guy who says "Ponzi scheme" first. With so much riding on this, maybe we (meaning governments...) should outlaw saying it out loud? After all this is global concern so the law should be global and universal from lowly bloggers even up to height of central banks of other countries.

You don't move that kind of quantity of gold out of another nation unless you perceive there to be an actual risk to it's securely remaining in one place and accounted for. I think they have a weather forecast for the USA that indicates a storm is coming...

In summary, with the repatriation of the gold the BuBa merely follows the guidance of the Bundesrechnungshof (Federal Court of Auditors) which also recommended regular physical examinations of the gold. So now it is being expected that the BuBa follows through with that recommendation of the Rechnungshof also and starts scanning its gold soon enough.

I'm a dude but alright. The motion by (among others) the German version of Ron Paul, MdB Frank Schäffler, insists on a 'complete and independently certified physical full-audit of german gold stock at all storage locations':

The argument? If every guy with even the smallest of business has to take inventory once per year - why would the BuBa be exempted? Why would they not lead by example?

It's difficult to interpret in any other way; also my translation of the original German is a little harder edge that the one Tyler gives; it doesn't "want" anything. It's very German; it says "and these arrangements will not endure". Certainly there;s nothing to discuss.

Real Question: I'm trying to learn this stuff so beat it into me, please.

3,396.0 German Tons of Gold
45.0% Stored at the New York Fed
1,528.2 Tons at NY Fed
305,640.0 Pounds at NY Fed
4,890,240.0 Ounces at NY Fed
$1,671.0 Spot Price of Gold/Ounce
$8,171,591,040.0 Total Gold in dollars

$8 billion plus in hard assets are about to vanish from the FED.

Over the last decade or so, there has been the rise of ETF's, electronically traded funds, that are, in essence, paper representations of various commodities. As far as Silver and Gold ETF's go, there may be as many as 45 to 100 unallocated shares per each ounce of actual metal ready for delivery. http://about.ag/HundredToOne.htm

Just on the low end, say 50 to 1, there would be 'evaporation' of the ETF value base.

That value dump would seem to have a built in rush to physical as holders demand the real metal, and the FED forced to scramble amidst an already substantial withdrawal. The 3,396 ton German demand and the possible 7,641 ton market demand is 11,037 Tons of Gold. While I rather doubt that there is actually 3,396 tons of identifiable German gold, let's say it exists. Wouldn't the drop of 7,641 tons of the paper gold come out of the speculous 8,300 tons the US is supposed to have? Leaving 700 tons available? Doesn't that mean a shortage of metal and a price spike?

Take, for instance, the key role that the US dollar plays as a reserve currency in the global financial system. The gold held with the New York Fed can, in a crisis, be pledged with the Federal Reserve Bank as collateral against US dollar-denominated liquidity

......hmm, wondering how loud the bells are ringing are ringing, DONG, DONG. But still time enough to kerbosh this outrage. we is thinking a way will be found to say ok but......you can't have it just yet. oldphart on the money with the numbers. US to push back on this VERY HARD. How hard is the question.

He was an 'exceptional' theif... [cept for the part about he was going for 'bearer bonds' ~ I'm afraid to say that his visions about sitting on an island picking up 20% 'interest' in joobux was not thought out very well]...

The central banks, having spent the past five years (and for decades before) conducting war against their own citizens thru printing and debasement of their own fiat currencies to fund unsustainable credit booms demanded by their political masters, are now turning their guns against each other to protect themselves. The End Game is on the horizon when Establishment morons begin fighting among themselves. This will not end well.

Look what the Jewish bankers have done to the world now for the second time. First in the 30's collapsing the German banking system, now in the US collapsing the reserve currency. When do you people plan on waking up to these MF's?

Rubin

Paulson

Greenspan

Volker

Geithner

Bernanke

Bankfien

Madoff

Dimon

This is just a few of our friendly bankers who have used their position to destroy your country and sold toxic waste to the world. Of course it required a complacent Congress and Senate most of which are now rich lifers who have sucked off the system and spent their time posturing for the next election while these Jews lined their pockets and their fellow tribe members to the detriment of the American middle class.

Why leave out the wonderful Gentile bankers and congressmen who've lined their pockets at the people's expense:

FDR

Rockefeller

JP Morgan

Sen. Nelson Aldrich

Arthur Shelton

Henry P. Davison

Frank A. Vanderlip

I could go on, but, what's the point? I'd love to know when these men and their Gentile successor converted to Judaism. All you ZHers who hate the Jews, really need to study a little history. There was one Jew who took part in forming the FED, the rest were "Christians." So, I guess both Jews and Gentiles "lined their pockets" when it came to fleecing the sheeple and today, all you anti-semetic morons have swallowed the bait and blame the terrifying Jews for a banking and brokerage system that was started and perpetuated by both Jews and Gentiles whose greed outweighed any "religious" or culteral heritage that either possessed.

Oh, and BTW, all you anti-semites who maintain you are "Christians" and love Jesus, the Jew, can go fuck yourselves.

Chill dude! Nobody here "hates" the Jews. People are just a little confused why Jews control the Fed, the Treasury, Congress and the White House. Why are the Wall Street banks run by Jews? Why are Europe's Central Banks run by Jews? All these Jews running everything makes Gentiles a little nervous. Maybe you have some insight.

Eustace Mullins said that the Jewish bankers don’t care about Jews; they care about wealth and power. And he also pointed out that at the very top of “the Pyramid”, Gentiles and Jews work together controlling the world’s finances. The “million dollar question” is: Who are these people?

Fuckin' Goy!(I suppose Carl's both Jewish and "one of "us" non-sheeple). It's fight club LaFong, last bastion of free(even stupid) speech. Spit it out, man! Though Goy myself, and a Jesus fan, I uptickted you for the somewhat sane, freely spoken rant!

This operation can now commence, because the banks have obtained three very large walnut shells. If you think these gold transfers are on the up and up, I suggest you get your life savings and go play three card monte.

Cuomo's bill, which was formally proposed after 8 p.m., also makes changes to laws regarding the mentally ill. If a mental-health professional decides someone is a potential risk to others or themselves, they would be required to alert the authorities, who would have the ability to confiscate any firearms that person may own.

Did not read the link, so don't know what details are in there, but it is my understanding that the last 10+ years the number of 'conditions' that are considered mental health problems have risen substaintially, and that something like 25% of the American population have these conditions/symptoms. Thus 25% of us can be considered mentally ill ???

Germany, as well as the rest of the world, knows how to spot a rat. The USA is not trustworthy, rather a nation of incorporated lawless enterprise tangled with corrupt government that operates in shadows, secrecy, and wages synthetic wars against ghosts as economic policy. Bernanke printed a fucking bull market to wipe out risk aversion and prudence for Christ sake!

I wouldn't store a fucking nickel in the lawless US of liberal A.

You read it here from Widowmaker, ZH, the USA as a trusted anything is gone. USA liars-fiat is dead.

Fascist government won't save your soul but a firearm can assure a chance -- get them while you still can.

The demographics in the US now favor the socialist / Marxist agenda. The opposition has no choice but to force a hard default now and wreck the whole thing. They have nothing to lose, because in 2 years they are likely out and the socialists will be fully in charge. The hard default changed the USSR, maybe it can change the USSA.

"This is a very calculated, political move to redefine the balance of political power among the central banks."

really? because no one cares about this except ZH. Germany moves what, $200B in their gold from the fed and it's going to realign central bank power and possibly set off a chain reaction scramble for physical? Gotta push the agenda , right? Do you guys actually say this this stuff out loud before you write it?

A) Don't you think that if this news would set off a scramble for phys it would be either done in secret or the US would back down and work out a deal with Germany?

B) What does Germany have to lose by doing this? nothing. so why not? If there's a fringe contingent in the country clamoring to get their gold back, then why not do it. If only to stop the complainers.

According to the Bundesbank statement above, they are only eliminating the inventory in Paris.

In New York, they are going "hold less gold" per Tyler's translation.

Apparently, they will continue to hold an amount sufficient to collateralize any reasonably foreseeable obligations, and bring home the rest. That will also give them the opportunity to verify that they have actual gold there pursuant to the "unnecessary" audit previously proposed and nixed.

Sometimes Occams razor speaks. "when you have two competing theories that make exactly the same predictions, the simpler one is the better." speaks louder than even the hot wind that blows from every bankers hole.

Could we be seeing the begining move to a gold standard....

Nah, that would fukin be way too utopian for the likes of the common man.

The issue is could this be a short covering setup and it certainly could.

Germany certainly knows that highlighting repatriation risks chaos witness the eggshells they walked on in november when the issue initially arose .

It looks kind of fishy a little too florid like the bloody queen inspecting bars in the vault ... it could preface an hellacious raid.

On the other hand these banksters are beginning to look downright idiotic with these juvenile machinations pretty soon the whole world will be laughing not just zh so they will get it in the back door rather than the front.... and somebody wants an awful lot of silver eagles suddenly if you can believe their crooked numbers ,,,, these foul hounds are on fumes.

Well I guess this means war. I wonder what kind of bullshit the bankers will cook up to justify a European war to repatriate the Germans' gold to America or UK. I mean seriously. Who can't see this shit from a mile away?

Why would anyone announce that they are moving gold. You do it quietly. Less risk that way. They story is BS. Would you tell your neighbors that you are going on a long trip with some of your "holdings"